The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
Michael Schuman, yet another of those economic commentators who does not understand Monetary Sovereignty, the basis of modern economics, today wrote a column titled, “Could Japan’s earthquake cause a debt crisis.” In this column he said,
Japan already has the largest debt burden of any industrialized country, at about 200% of GDP, and even though Japan is not yet showing signs of following Ireland, Greece and the rest of the euro zone periphery into a full-blown debt crisis . . .
I wonder how much more evidence will be required, before Michael finally understands that Japan, like the U.S., is Monetarily Sovereign, while Ireland et al are monetarily non-sovereign. Monetarily Sovereign nations, having the unlimited ability to create their sovereign currency, never can have a “debt crisis” (assuming “debt crisis” means being unable to pay bills).
What will it take, Michael? A debt/GDP of 300%? 500%? 1,000,000%? At what point will you and the rest of the debt hawks finally come to the realization that debt/GDP is meaningless for a Monetarily Sovereign nation?
By the way, all the collections being taken up world wide to help Japan, while kind-hearted and praiseworthy, are useless. Japan is not short of money. It can create unlimited money. What Japan needs are equipment and people, to clean up the mess and to rebuild. Engineers, doctors, architects, planners + every kind of heavy machinery you can imagine. Japan can buy all the machinery it needs, but buying the people is much more difficult, so anyone truly wishing to help the Japanese people will try to learn what sort of human help is needed, and volunteer.
But save your money. Japan does not need it.
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth.